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Opinion: Break Up the Big Banks

This transcript has been automatically generated and may not be 100% accurate.

... banks are bigger today than they were before the financial crisis began ... so what should be done luckily we've got FDIC Vice Chairman ... Song coining here ... to tell a strong ... set the stage here I'm just how dangerous ... is the capital situation these banks and how under capitalized ... well I think that ... you were working through this humble can choose and so forth and I've been a ... supporter of tangible capital which is ... takes all the ... show was a ... non real loss absorbing capital ... and weekends ... in the largest institutions average around five percent of tangible concrete tangible assets ... that ... community banks and regional banks have about nine percent so ... in a comparative sense they're almost only happens much so ... you have to be judged accordingly ... continued work so you think the higher capital standards of the key to ... avoiding too big to fail to make these banker at least ... if we have to have too big to fail it least of these banks pepper Capital and I think higher capital standards are absolutely necessary to have a more stable financial system ... a system that doesn't go up and down violently but the iPad uses an environment in ... a more stable growth ... I were still people ... capital is for good management and produce mistakes and learn to make that mistake to move on when you don't have enough ... to target to reduce mistakes I was out the other approach which full price was supposed to do which was just to ... break up the banks to go back to a pre Glass Steagall world ... the support that ... I do support ... of ... the Volcker rule which takes out these hot I e these other risk activities history and from outside of the sick man ... and I am supported that I would go further I would take them and partly out of the ... financial ... Winkelmann company renewed Shepherd Corporation ... and thus can find the safety net ... the ... FDIC insurance are we providing that ... and the ... discount window to ... thanks to only have the payment system in ... many processed in and take all these other activities ... premature for companies ... that don't get the safety net that can compete in the market ... and thirty or Succeed according to the market ok that I knew when I are sitting in New York not so far from Wall Street and Wall Street we yell and scream and say what's gonna happen so my ... very lucrative underwriting business is my IPO's that ... the fact these I get to that stuff what what would you say is a ... great question I think it would ... that those activities when go where they would go into other corporations ... and they would be I think ... more specialized they would be a more competitive ... more innovative and I think ... Wall Street in United States would actually be a beneficiary of that ... because we have a more dynamic capital market ... not one that stayed now underneath the safety net ... regulated heavily and so forth and I think we'll be better off or not is a political by and for this kind of breaking up the banks on Capitol Hill who support this idea ... well it's getting some support by both parties ... and ... cinders Bremner dinners legislation has been introduced ... this legislation and use but it certainly hasn't yet has a moment to point to pass ... but I think it needs to be discussed in the Guineas we brought forward because ... we want to avoid the next crisis and we need anything about that now not when the next crisis comes ... and there will be a crisis I just don't know when ... I'll what you say to the critics who would look at the last financial crisis is a well ... that was the housing crisis Bear Stearns was really ... a deposit taking bank it down ... here you're proposing the solutions to problems that ... we didn't really create the last crisis so why do this well I'd I think first of all when we merged investment banking and commercial banking Bear Stearns had become more bank like edition overnight deposits to cold money markets and the trade in one pot were deposit resort deposit ... and then leverage up their balance sheet thinking and with the with investors taking well it might be bailed out probably will be bailed out ... and guess what they work ... so I think you need to ... be and that use of those kinds of deposit taking activities for them to buy and ... put him back as they were as investment bank somewhat incomplete look to see him be very successful ... very successful as ... separate ... entities competing in a very vibrant market call there were yellow real solutions to our real problem of ... really too big to fail banks FDIC Vice Chairman ... company thank you so much thanks for being ... with us ... stay tuned more OpinionJournal to come ...